We have constructed a cDNA library from a ras revertant cell line in a eukaryotic expression vector and screened this library for cDNA molecules capable of suppressing ras transformation. The screening was accomplished by transfection of the cDNA library into a ras transformed cell line and selection for drug resistance and phenotypic change. More than 100 morphologically nontransformed colonies were isolated using this strategy. Two cDNAs isolated from primary transfectants have been found on secondary screening to be capable of suppressing the ras transformed phenotype. The first of these cDNA encodes a small RNA, 4.5S RNA, a molecule which is capable of suppressing the ras transformed phenotype when it is expressed at a high level. High levels of 4.5S RNA are found in ras revertant cell lines and reduced levels in ras transformed cell lines compared to the level of this RNA in normal rodent fibroblasts. In addition, another recovered cDNA, referred to as rsp-1, is a novel gene which specifically suppresses v-Ki-ras and v-Ha-ras transformation of fibroblasts and epithelial cells. The rsp-1 protein contains a series of leucine based repeats homologous to those found in the putative ras binding region of yeast adenylyl cyclase. These findings suggest that rsp-1 may physically associate with ras p21 and disrupt Ras signal transduction in this way. rsp-1 is a phylogenetically highly conserved molecule; cloning and sequencing of the human rsp-1 cDNA revealed that the human rsp-1 protein is 96% homologous to the mouse rsp-1. Screening of over 100 cell lines and tissue, both human and rodent, revealed that rsp-1 RNA expression is ubiquitous. The human rsp-1 gene has been localized to human chromosome 10. Our current efforts are aimed at elucidating the mechanisms by which this molecule disrupts ras signal transduction in vitro and determining if the rsp-1 locus is disrupted in human tumors.